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L.A. joins state act in runaway fight

Resolution backs tax breaks for Calif. prod'n

Los Angeles City Council member Wendy Greuel has introduced a resolution in support of state legislation that would provide $650 million in tax breaks for filmmakers to keep production in California.

The legislation, Assembly Bill 2747, is scheduled to be heard Aug. 7 by the state senate revenue and taxation committee. The resolution by Greuel, a former DreamWorks exec, will first be heard by the council’s committee on rules, elections and intergovernmental relations.

The California Assembly backed AB 2747 in May. The legislation creates a 15% wage-based tax credit for the first $25,000 paid to each employee involved in production of California-based films with budgets between $200,000 and $10 million, starting in 2004.

Gov. Gray Davis suggested the bill, which mirrors proposed federal legislation, in January — amid strong support from Hollywood unions and trade groups. He designated 2004 the start date in order to allow the state to recover from its current budget deficit.

Backers believe such credits can provide a significant lure to filmmakers to counteract higher costs of shooting in the United States and extensive incentives from foreign governments. But committee consultant Martin Helmke has voiced skepticism as to the effect of AB 2747, contending it will be aimed mostly at productions that already have made the decision to shoot in California despite out-of-state incentives.

The combo of runaway production and last year’s supercharged activity due to strike fears has led to sharp declines in 2002 production activity in Los Angeles. Off-lot permitted days amounted to only 3,519 in the first six month of this year, barely half the 6,952 days that were logged during the first six months of 2001.

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